Dec '10/Jan '11

Northwest Territories

Diamonds sparkle under northern lights

Surrounded by the waters of Lac de Gras, the Diavik Diamond Mine consists of two open pits. In 2012, the open pits will be complete and Diavik will be an all underground mine | Photo courtesy of Diavik Diamond Mines

Diamonds are currently the lynchpin of the mining industry in the Northwest Territories. It is the largest producer of diamonds in the Americas, and the third largest producer by volume on the planet.

The Northwest Territories’ mining potential does not end with diamonds. Exciting opportunities exist within the territory in gold, lead, zinc, copper, tungsten, silver, platinum and rare earth elements. Lightly explored, and with its potential largely untapped, the NWT is a treasure trove for the mining industry.

The Northwest Territories currently has three commercially producing diamond mines, and a fourth mine is undergoing an environmental review. BHP Billiton Canada Inc.’s EKATI Diamond Mine started the diamond boom and has been in production since 1998. It was Canada’s first diamond mine; production in 2009 was approximately 3.2 million carats.

The territory’s second diamond mine, Diavik, has been in production since 2003. It is located near the EKATI site, 300 kilometres northeast of Yellowknife, and has produced over 50 million carats of diamonds since it opened. The mine’s production for 2009 totalled approximately 3.3 million carats.

De Beers Canada’s Snap Lake Mine is the NWT’s third diamond mine and has been in production since 2008. Located 220 kilometres northeast of Yellowknife, Snap Lake is Canada’s first completely underground diamond mine and was De Beers’ first mine outside of Africa. De Beers Canada is also involved in a joint venture with Mountain Province Diamonds Inc. in the Gahcho Kué project. This would be the territory’s fourth producing diamond mine and is currently under environmental impact review. The Gahcho Kué project has a total indicated resource of approximately 23.6 million carats.

The Northwest Territories’ diamond industry was not immune to the effects of the recent global economic crisis, as production numbers for all three producing mines were down in 2009 compared to 2008. The outlook for diamond mining remains positive, though, as improved economic conditions led to the cancellation of planned winter shutdowns at both the Diavik and Snap Lake mines.

More than diamonds

The fourth producing mine in the Northwest Territories is North American Tungsten Corporation’s Cantung Mine, which has been producing tungsten since 1962. The mine shutdown in September 2009. However, in September 2010, the company announced that it was reopening the mine and expanding its reserves. The mine, located just east of the NWT-Yukon border, has mined approximately 100,000 tonnes of tungsten per quarter for the last two years.

Traditionally, gold mining has been of the utmost importance to the territory, and recent exploration suggests that the mineral is ready to make its return to prominence. Tyhee Development Corporation’s Yellowknife gold project is currently undergoing an environmental assessment. Located 90 kilometres north of Yellowknife, it has an estimated 1.2 million ounces of gold resources. As well, Fortune Minerals’ NICO project is currently moving through the permitting process. The project is located 160 kilometres north of Yellowknife and contains 21.8 million tonnes of Proven and Probable gold, cobalt and bismuth reserves suitable for a 15-year mine life.

Another project that has great potential is Seabridge Gold’s Courageous Lake project, located 240 kilometres northeast of Yellowknife. With 4.2 million Measured and Indicated reserves of gold, the project represents one of the largest undeveloped gold reserves in Canada. Seabridge spent $20 million this past year advancing the project.

The Northwest Territories is also poised to benefit from the global green revolution, as Avalon Rare Metals’ Nechalacho project is a promising rare earth elements discovery. These materials are used in many projects integral to “green” technologies, including wind turbines and hybrid cars, which are in great demand. The Nechalacho project, located 100 kilometres southeast of Yellowknife, has an estimated nine million tonnes of Inferred Resources, with a potential resource base of 14.8 million tonnes of Indicated Mineral Resources and an estimated 175.5 million tonnes of Inferred mineral resources. The proposed mine could have a life of 15 years or more. Avalon is currently working on a prefeasibility study and hopes to have the mine producing by 2013.

Government assistance

One example of Government of the Northwest Territories (GNWT) support to industry is its partnership with the federal government to gather new geosciences data. It is estimated that every $1 million of government investment in the geosciences knowledge base stimulates $5 million in private-sector expansion.

Another mining initiative is the Northern Mining Workforce Memorandum of Understanding initiative. Signed in 2008, its partners include the GNWT’s departments of Industry, Tourism and Investment, Education Culture and Employment, and three diamond mines. Its goal is to develop the skills of Northwest Territories workers and to attract and retain the workforce.

By Darren Campbell, Public Affairs and Communications, Government of the Northwest Territories

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